Market Direction: BULLISH alert
issued 1/10/2019
Trade wars and growth warnings are a concern.
Vote BULLISH (Up) or BEARISH (Down) in the upper right side bar, your thoughts on the current stock market direction. Leave a comment. Now for the news…
The economy
The S&P 500 gained 1.3% on Friday, boosted by trade talk optimism and waning concerns about the U.S. economic outlook. Friday's gains extended the benchmark index's weekly gain to 2.9%.
The Dow Jones Industrial Average (+1.4%), the Nasdaq Composite (+1.0%), and the Russell 2000 (+1.0%) also extended their weekly gains to 3.0%, 2.7%, and 2.4%, respectively.
Within the S&P 500, all 11 sectors finished higher with the cyclical energy (+1.9%), industrials (+1.9%), financials (+1.7%), and materials (+1.6%) groups leading the broader market higher.
Friday's presumed catalyst was a Bloomberg News report highlighting China's willingness to eliminate the U.S. trade imbalance.
According to the report, China made an offer during trade negotiations earlier this month to boost the amount of U.S. imports, such that the trade balance with the U.S. would be $0 by 2024. It's not the news itself that sparked an extended rally, but the tenor of recent trade headlines that have fed hope for a meaningful trade deal.
It is evident that the market is beginning to price in the positive effects of a trade deal, which, if struck, should bode well for global growth and corporate earnings prospects.
In addition, strength in manufacturing output, which drove a 0.3% increase in industrial production in December (Briefing.com consensus 0.2%), and the capacity utilization rate rising to 78.7% (Briefing.com consensus 78.5%), helped temper some of the pressing economic growth concerns that were so prominent at the end of 2018.
The easing concerns over economic growth were subsequently made apparent across capital markets.
The S&P 500 cyclical sectors outperformed; U.S. Treasury prices finished lower, driving yields higher; the dollar extended gains; and oil prices ($53.84/bbl, +$1.85, +3.6%) increased, as did copper prices ($2.72/lb, +0.04, +1.5%).
The yield on the 2-yr Treasury note rose five basis points to 2.61%, and the yield on the 10-yr Treasury note rose four basis points to 2.78%. The U.S. Dollar Index increased 0.3% to 96.37.
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, write us. Share with a friend.
By the numbers the weekly closing index numbers compared to the initial BULLISH recommendation closing numbers:
Stock Market Closing Numbers
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compared to Recommendation Numbers
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1/10/2019
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1/18/2019
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Difference
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24,001.90
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24,706.35
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704.45
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6,986.07
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7,157.23
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171.16
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2,596.64
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2,670.71
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74.07
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